By Maheesha Mudugamuwa
The satyagraha campaign launched by the employees of the Sevanagala sugar factory against the alleged attempts by the Government to privatise it continues, entering its 13th day yesterday (8).
The campaign was launched on 27 May against the proposal made in April by Minister of Public Enterprise, Kandyan Heritage, and Kandy Development Lakshman Kiriella to rescind the Expropriation Act passed during the previous regime, which allows the government to take over private enterprises not performing up to expectations.
The revival of the Underperforming Enterprises or Underutilised Assets Act No. 43 of 2011 was enacted in 2011 to vest underperforming enterprises or underutilised assets with the Government, making provisions for their proper management, administration, or revival, and for the payment of relevant compensation.
The Act, which had come under criticism from credit agencies and leading business chambers, allows the government to appoint a competent authority which will control, administer, and manage the enterprise or asset to ensure its revival by restructuring or entering into a management contract.
However, the Government believes the Act is a barrier to attracting investors to Sri Lanka as it creates a sense of uncertainty in the minds of the investors of private capital. The proposal to repeal the Act was made in the budget speech in 2018.
As a result, in April, Cabinet approval was granted for the proposal by Kiriella to present the draft bill to repeal the Expropriation Act in Parliament for approval.
The underperforming enterprise named in the Act was Hotel Developers (Lanka) PLC, the company that owns Hilton Colombo.
Underutilised assets named
The underutilised assets named are the Pettah property of Chalmers Granaries, the Badulla properties of Colombo Commercial Company, the Pettah and Narahenpita properties of Lanka Tractors Ltd., land belonging to Pelwatte Sugar Industries Ltd., land owned by Sevanagala Sugar Industries Ltd., properties of Sinotex (Lanka) Ltd., Jaqalanka Ltd., Plymouth Industries (Pvt.) Ltd., Cosmos Macky Industries Ltd., Kabool Lace (Pvt.) Ltd., land formerly owned by Cashew Corporation, Intertrade Lanka (Pvt.) Ltd., Suchir NEB Projects (Pvt.) Ltd., Ceylinco Leisure Properties Ltd., Seetha’s Fashion (Pvt.) Ltd., D.C. Apparel (Pvt.) Ltd., Needle Crafts (Pvt.) Ltd., HY Fashion Garments (Pvt.) Ltd., Collins Garment (Pvt.) Ltd., Ruhunu Putha Apparels (Pvt.) Ltd., Sanjaya Garments (Pvt.) Ltd., Macfa Apparel (Pvt.) Ltd.; Yobeedha Associates (Pvt.) Ltd., Dynamic Clothing (Pvt.) Ltd., 609 Polymers Exports (Pvt.) Ltd., Cosco Polymer Lanka (Pvt.) Ltd., Great Wall Thread Manufacturing (Pvt.) Ltd., Adamjee Extractions (Pvt.) Ltd., Data Food (Pvt.) Ltd., Tendon Lanka (Pvt.) Ltd., Rican Lanka (Pvt.) Ltd., Composite Tower Solutions (Pvt.) Ltd., Health Food Products (Pvt.) Ltd., Sri Chirag (Pvt.) Ltd., Royale Exports (Pvt.) Ltd., and Continental Vanaspati (Pvt.) Ltd.
Implications to Sevanagala
Inter Company Employees Union (ICEU) Chairman Wasantha Samarasinghe told The Sunday Morning that the Government’s plan was to vest these companies with the Treasury and not release the burden.
“But the employees are afraid that these institutions would again be privatised as the Treasury had no authority to run such institutions,” he said.
An employee of the Sevanagala sugar factory who wished to remain anonymous told The Sunday Morning that Sevanagala was not under the purview of Minister Kiriella, and if the Bill to repeal the Act was passed in Parliament, it would apply to Sevanagala as well.
The Sevanagala sugar factory, which was under the purview of Minister of Industry and Commerce Rishad Bathiudeen was moved under Minister Kiriella following the recent Cabinet reshuffle, and now comes under the supervision of the Ministry of Plantation Industries.
“We had a meeting with Minister of Plantation Industries Navin Dissanayake and he promised us that he would not let Minister Kiriella change the status of the Sevanagala sugar factory. He promised us that he would put a separate cabinet paper asking Minister Kiriella to remove the Sevanagala factory from the list. We are still waiting, and the satyagaraha will continue until they give us a proper solution,” he noted.
Failure on part of the Government in revival
The Sri Lanka Nidahas Sevaka Sangamaya, Jathika Sevaka Sangamaya, Progressive Workers Union, and Inter Company Employees Union joined the campaign to show their objection to the proposal.
When The Sunday Morning contacted Dissanayake, he said the problem at the Sevanagala sugar factory had already been solved.
“We held discussions with all the unions regarding this issue,” he said.
However, the Ministry said that Dissanayake had sent a letter asking to amend sections in the Expropriation Act pertaining to the Sevanagala and Pelwatte sugar factories, and to seek the approval of the Plantation Minister if any decisions were to be taken with regard to those two institutions.
Speaking to The Sunday Morning, All Ceylon Farmers Federation (ACFF) President Namal Karunaratne alleged that the Government had failed to revive the loss-making sugar factories in the country, stating: “Only 7% of the total demand is produced by the local sugar factories, as its production is now focused on arrack,” he stressed.
“Arrack should only be a by-product, but here in Sri Lanka, the main focus of these factories is arrack. That’s why they are making losses,” Karunaratne stressed.
“The Kantale sugar factory was closed down and all the machines are now in bad condition; the situation in all the other factories is the same. They have very old machines, which were imported in the 60s or 70s and those machines are not performing well. We need new technology and new machines, but the Government is not investing in these companies. Instead, they are resorting to privatisation,” he stressed.
Not just the employees, the farmers too are against the privatisation, he added.
“There are around 20,000 sugar cane farmers in the country, and they are also in a very pathetic situation – similar to all the other farmers. They were paid only Rs. 5,000 per sugar cane tonne,” Karunaratne said.
The satyagraha campaign launched by the employees of the Sevanagala sugar factory against the alleged attempts by the Government to privatise it continues, entering its 13th day yesterday (8).
The campaign was launched on 27 May against the proposal made in April by Minister of Public Enterprise, Kandyan Heritage, and Kandy Development Lakshman Kiriella to rescind the Expropriation Act passed during the previous regime, which allows the government to take over private enterprises not performing up to expectations.
The revival of the Underperforming Enterprises or Underutilised Assets Act No. 43 of 2011 was enacted in 2011 to vest underperforming enterprises or underutilised assets with the Government, making provisions for their proper management, administration, or revival, and for the payment of relevant compensation.
The Act, which had come under criticism from credit agencies and leading business chambers, allows the government to appoint a competent authority which will control, administer, and manage the enterprise or asset to ensure its revival by restructuring or entering into a management contract.
However, the Government believes the Act is a barrier to attracting investors to Sri Lanka as it creates a sense of uncertainty in the minds of the investors of private capital. The proposal to repeal the Act was made in the budget speech in 2018.
As a result, in April, Cabinet approval was granted for the proposal by Kiriella to present the draft bill to repeal the Expropriation Act in Parliament for approval.
The underperforming enterprise named in the Act was Hotel Developers (Lanka) PLC, the company that owns Hilton Colombo.
Underutilised assets named
The underutilised assets named are the Pettah property of Chalmers Granaries, the Badulla properties of Colombo Commercial Company, the Pettah and Narahenpita properties of Lanka Tractors Ltd., land belonging to Pelwatte Sugar Industries Ltd., land owned by Sevanagala Sugar Industries Ltd., properties of Sinotex (Lanka) Ltd., Jaqalanka Ltd., Plymouth Industries (Pvt.) Ltd., Cosmos Macky Industries Ltd., Kabool Lace (Pvt.) Ltd., land formerly owned by Cashew Corporation, Intertrade Lanka (Pvt.) Ltd., Suchir NEB Projects (Pvt.) Ltd., Ceylinco Leisure Properties Ltd., Seetha’s Fashion (Pvt.) Ltd., D.C. Apparel (Pvt.) Ltd., Needle Crafts (Pvt.) Ltd., HY Fashion Garments (Pvt.) Ltd., Collins Garment (Pvt.) Ltd., Ruhunu Putha Apparels (Pvt.) Ltd., Sanjaya Garments (Pvt.) Ltd., Macfa Apparel (Pvt.) Ltd.; Yobeedha Associates (Pvt.) Ltd., Dynamic Clothing (Pvt.) Ltd., 609 Polymers Exports (Pvt.) Ltd., Cosco Polymer Lanka (Pvt.) Ltd., Great Wall Thread Manufacturing (Pvt.) Ltd., Adamjee Extractions (Pvt.) Ltd., Data Food (Pvt.) Ltd., Tendon Lanka (Pvt.) Ltd., Rican Lanka (Pvt.) Ltd., Composite Tower Solutions (Pvt.) Ltd., Health Food Products (Pvt.) Ltd., Sri Chirag (Pvt.) Ltd., Royale Exports (Pvt.) Ltd., and Continental Vanaspati (Pvt.) Ltd.
Implications to Sevanagala
Inter Company Employees Union (ICEU) Chairman Wasantha Samarasinghe told The Sunday Morning that the Government’s plan was to vest these companies with the Treasury and not release the burden.
“But the employees are afraid that these institutions would again be privatised as the Treasury had no authority to run such institutions,” he said.
An employee of the Sevanagala sugar factory who wished to remain anonymous told The Sunday Morning that Sevanagala was not under the purview of Minister Kiriella, and if the Bill to repeal the Act was passed in Parliament, it would apply to Sevanagala as well.
The Sevanagala sugar factory, which was under the purview of Minister of Industry and Commerce Rishad Bathiudeen was moved under Minister Kiriella following the recent Cabinet reshuffle, and now comes under the supervision of the Ministry of Plantation Industries.
“We had a meeting with Minister of Plantation Industries Navin Dissanayake and he promised us that he would not let Minister Kiriella change the status of the Sevanagala sugar factory. He promised us that he would put a separate cabinet paper asking Minister Kiriella to remove the Sevanagala factory from the list. We are still waiting, and the satyagaraha will continue until they give us a proper solution,” he noted.
Failure on part of the Government in revival
The Sri Lanka Nidahas Sevaka Sangamaya, Jathika Sevaka Sangamaya, Progressive Workers Union, and Inter Company Employees Union joined the campaign to show their objection to the proposal.
When The Sunday Morning contacted Dissanayake, he said the problem at the Sevanagala sugar factory had already been solved.
“We held discussions with all the unions regarding this issue,” he said.
However, the Ministry said that Dissanayake had sent a letter asking to amend sections in the Expropriation Act pertaining to the Sevanagala and Pelwatte sugar factories, and to seek the approval of the Plantation Minister if any decisions were to be taken with regard to those two institutions.
Speaking to The Sunday Morning, All Ceylon Farmers Federation (ACFF) President Namal Karunaratne alleged that the Government had failed to revive the loss-making sugar factories in the country, stating: “Only 7% of the total demand is produced by the local sugar factories, as its production is now focused on arrack,” he stressed.
“Arrack should only be a by-product, but here in Sri Lanka, the main focus of these factories is arrack. That’s why they are making losses,” Karunaratne stressed.
“The Kantale sugar factory was closed down and all the machines are now in bad condition; the situation in all the other factories is the same. They have very old machines, which were imported in the 60s or 70s and those machines are not performing well. We need new technology and new machines, but the Government is not investing in these companies. Instead, they are resorting to privatisation,” he stressed.
Not just the employees, the farmers too are against the privatisation, he added.
“There are around 20,000 sugar cane farmers in the country, and they are also in a very pathetic situation – similar to all the other farmers. They were paid only Rs. 5,000 per sugar cane tonne,” Karunaratne said.